The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“THE COST OF HIGH ENERGY PRICES ON OUR NATION'S AGRICULTURE PRODUCERS” mentioning the U.S. Dept of Agriculture was published in the Extensions of Remarks section on pages E831-E832 on May 17, 2001.
The publication is reproduced in full below:
THE COST OF HIGH ENERGY PRICES ON OUR NATION'S AGRICULTURE PRODUCERS
______
HON. JERRY MORAN
of kansas
in the house of representatives
Wednesday, May 16, 2001
Mr. MORAN of Kansas. Mr. Speaker, I rise today to call attention to the energy crisis that is draining the farm economy. My district, like many rural areas across the country, has suffered greatly as a result of high energy prices. Agricultural producers in particular have been hit hard as higher diesel and natural gas prices increase fuel, irrigation energy, and fertilizer costs.
Our reliance on foreign oil and dependency on imported fuel has created a crisis for our nation's farmers. Kansas producers' net income fell 7.7 percent in 2000, down 11 percent from the five-year average, largely because of the summer drought and dramatic increases in the price of energy. On a nationwide average, energy costs alone caused a 6 percent decrease in farm income.
According to the Kansas Farm Management Association, average cash operating expenses on Kansas farms increased 6.2 percent last year, and the increase was largely related to energy prices. Combined gas, fuel and oil expenses rose $2,551 per farm, a 33 percent increase. Prices for nitrogen fertilizers, a natural gas derivative, were the primary determinant in driving fertilizer costs up more than 10% above the 1999 average. Irrigation energy costs for a typical irrigated corn farm in western Kansas were $34,026, approximately one-fourth of the gross revenue generated. This figure represents an increase of almost $18 per acre just to run the irrigation system.
With commodity markets remaining at record lows and the tremendous increase in energy prices, last year it cost farmers more to produce grain than they were paid for it. Without emergency assistance, producers would have lost money.
Unfortunately, projections for the 2001 crop year are not optimistic. Given the current status of energy supply and demand, the Department of Agriculture predicts that producers will face a 15 percent decrease in net cash income due to energy and fertilizer costs. Losses will be still greater for irrigators.
In addition to the negative impact on crop producers, the livestock segment of the agriculture industry has also been affected by fuel costs. According to the National Cattleman's Beef Association Cattle-
Fax, high energy prices have cost the fed cattle market $4 per hundred weight in decreased demand. The crises spreads across commodities and across all regions of the country, from rice producers in California, to Kansas wheat farmers, to New England dairies.
Since I arrived in Congress, I have asked both the Administration and my colleagues to develop a national energy policy. I look forward to reviewing the findings of the Domestic Energy Policy Task Force headed by Vice President Cheney when their report is released tomorrow. As we finally begin to look at legislation regarding national energy policy, it is important to keep in mind both the short and long term challenges that exist in the agricultural sector.
____________________
